European Penetration into India

Causes behind Era of Discovery and Sea Voyages

• Decline of Constantinople:

• Conquest of Constantinople by

Ottomans in 1453 blocked all trading

routes between India and Europe.

• With this, the merchants from

Genoa and Venice monopolised the

spice distribution in Europe.

• Thus, there started a competition in

Europe for sea voyages to discover

alternative routes to India.

• Adventurous spirit inspired by the Renaissance:

• It reduced the influence of religion on people's mind and emphasised the dignity

of man. This humanistic consciousness also encouraged people to engage in

maritime activities by taking an adventurous spirit among them.

• Maritime Innovation and technological advancement:

• In the field of ship design and navigation, technological advancement became

commonplace. (e.g. use of a compass or astrolabe)

• Religious Reform, rivlary and Zeal:

• After this the Roman Catholic Church system was disintegrated and two religious

sub-sects Roman Catholic and Protestant came into existence. Both were inclined

to spread their influence. So, they also encouraged sea voyages.

• Commercial Revolution, Rising prosperity:

• This period was marked by expansion in European Economy.
• As a result of this expansion, there was the rise of a prosperous class which

intensified the demand for Indian products.

• Rising monarchies: It was the era of the rise of some ambitious monarchs in Europe who

started to finance sea voyages.

• Mercantilism: (economic system from 1500-1800)

• Mercantilismisan economicpracticeby which governments used theireconomies

to augment state power at the expense of other countries.

• In mercantilism, wealth is viewed as finite and trade as a zero-sum game. Thus,

governments sought to ensure that exports exceeded imports and to accumulate

wealth in the form of bullion (mostly gold and silver).

Estado da India

After Vasco da Gama's successful voyage

to India in 1498, the Portuguese Crown

sought to establish a monopoly over the

spice trade in Indian Ocean. This was

against the Indian tradition of 'open sea

policy'.

To enforce the monopoly, a combination

of techniques were used:

• Strategic control of key ports along the Indian Ocean.

• Fransisco Almeida introduced Blue Water Policy. Instead of a territorial empire,

he preferred supremacy at sea.

• The conquest of Goa (1510) and Malacca (1511) by Albuquerque provided the

Portuguese with a secure base for further operations and control over critical sea

routes. They also established bases in Hormuz (1515) and attempted to dominate

the spice trade passing through these crucial waterways Persian Gulf and Red Sea.

• Network of forts

• Portugueseconstructedanetworkoffortsandtradingpostsalongtheirmari time

empire (e.g. Fort Jesus in Mombasa, Diu Fort in India).

• These fortified outposts served as military bases, administrative centers, and

trading hubs, allowing the Portuguese to maintain control over vast territories

despite their numerical inferiority.

• Portuguese-Ottoman rivalry for the domination of Indian Ocean.

• The Ottoman Empire, a major power in the region, posed a challenge to

Portuguesedominance.The Battleof Diu in 1509 andsubsequentconflictsmarked

a struggle for control over key trade routes.

• 'Cartaz-Armada-Kafila' system

• (Arabic 'qirat' meaning paper/document)
• Portuguese essentially served as middlemen between growers, traders, and

consumers.

• Cartaz was a license for safe conduct issued by the Portuguese to native ships in

exchange for money. It was essentially a pass or permit that every ship had to

purchase to navigate in the waters under Portuguese influence.

▪ It allowed ships to navigate in Portuguese-controlled waters and trade at

designated ports. Ships were compelled to ply along specified routes and

call on to Portuguese ports where they had to pay custom duties. Ships

without a Cartaz were subject to seizure and confiscation.

▪ Merchants had to pay a fee for the privilege of obtaining a Cartaz.

▪ They were prohibited from carrying commodities such as spices which

were sought by Portuguese.

• This system was a powerful deterrent against potential competitors, as it

restricted access to vital trading routes and ensured that only Portuguese-

approved vessels could engage in profitable spice trade.

• Naval strength (Armada):

• Armed ships of Portugues cruised trade routes, intercepting vessels without

cartazes or violating regulations. Portugal's ships, like the carrack, were advanced

ensured control over crucial sea lanes.

• Apart from trade, Portuguese merchants were involved into see piracy as well.

Was the Monopoly really established?

Despite the efforts and unrestricted use of violence, the Portuguese were unable to

meaningfully dominate pepper-producing areas.

• The maintenance of forts and armada to enforce monopoly was a costly affair.

• The Sea-Borne"empire"ofthe Portuguesewashugeintermsoftheareathey were

trying to control. The financial and the human resources available for this vast

undertaking were relatively small.

• Portugal's lack of control over the territories where pepper was grown made their task

difficult.

• The Portuguesealsofounditdifficulttoimposecompletemonopolyduetotheopposition

of Asian traders and rulers.

• There were frequent 'leakages' in the system. The Gujarati merchants collected

vast amount of pepper in 1540's and 1550's in the Bay of Bengal and traded it all

over Asia.

• The Portuguese failed to take over Aden, which was acquired by a hostile Ottoman

empire in 1538. This left open a vital gap in their monopolistic designs.

• Although Cape of Good Hope was monopolized by Portuguese, the traditional sea-cum-

land route from West Asia continued to operate like before, despite Portuguese efforts

to close it down.

• Through the 16 th century, they tried to concentrate all East African trade to their forts at

Malindi in Mozambique, decimating local textile manufacturers. However, the African

demand for Gujarati textiles stayed high.

• Soon, the British and Dutch emerged as competitors and challenged the Portuguese hold

over the trade.

Thus, Portuguese empire remained to be a sort of a re-distributive empire, where they

skimmed off a layer of profits derived from the maritime trading activities of others for

themselves. Nevertheless, the activities of Arab and Gujarati merchants received some

setback.Few Indianshipsnowcouldsailto East Africaand Arabia,aswellasfar Eastand Spice

Islands.Bythe latterhalfof the 16 th c,over 75% of thepepper availablein Europeanmarkets

was being supplied by Portuguese, which was primarily sourced from India.

The reasons behind the decline of Portuguese power:

Portuguese definitely created a huge maritime empire and started to monopolize Indian

Ocean trade. However, there were some major flaws in their operation.

• Economic reason:

• They didn't introduce anything new economically. Only sheer violence to create

monopoly over what already existed.

• Religious Policy:

• Portuguese followed the policy of religious bigotry to promote Christianity and

encouraged forcible conversions.

• Such policy of the Portuguese antagonized local population collaborators. Instead

of gaining collaborators, they created powerful adversaries in the vicinity.

• Administrative reasons:

• Estado da India was a crown initiative. The king appointed courtiers and country

nobles in the administration who had access to the king directly. This led to ill-

development of civilian bureacracy with single point of command.

• Domestic limitations:

• Portugal was a smaller country, and it was lacking in sufficient resources to

maintain a proper rivalry with other European countries.

• Portuguese society was feudal in character. There, the dominance of the

aristocratic class on the middle class was a common phenomenon.

• In 1580,Portugalwasconqueredby Spainandsoitbecamethepartof the Spanish

Empire. As long as Spain maintained its naval supremacy, even Portugal was in a

strong position. But once the Spanish Armada (naval force) was defeated by the

British in 1588, it lost its naval supremacy. Consequently, even Portugal became

looser.

For allthese reasons,after brilliant initial success,Portuguese colonies remained stagnant for

long time and then declined. When other European powers emerged on the scene, the

Portuguese lost most of their gains.

Impact and Significance of the Portuguese on India:

Althoughthe Portugueseinvasionof Indiawasgeographicallyquiterestricted,the Portuguese

exploration of the East has had a profound impact on the world's socio-political order and

economics. In the development of the contemporary world, it marked a turning point.

• Armed Trade:The Portugueseintroducedtheconceptofarmedtradein the Indian Ocean.

This was a precursor to conquest.

• Empire Building: Not only were the Portuguese the earliest to arrive in India, but they

were also the first to have the vision of creating an overseas empire.

• Agriculture: The Portuguese introduced new varieties of crops such as mango, papaya,

pineapple, guava, chilli peppers, kidney beans, potato, tomato, groundnuts, cashew nuts,

tobacco, maize etc.

• Christianity: The spread of Christianity started with the arrival of the Portuguese. St.

Francis Xavier led an evangelical mission to India.

• Printing Press: The Portuguese introduced the

printing press to India and printed copies of the

Bible in Malayalam and Kannada.

• Architecture: The Portuguese built many churches

and forts on the western coast of India, including

The Churches and Convents of Goa, a UNESCO

World Heritage site.

• Goan Culture: Cultural exchanges between the

Portuguese settlers and the Goan natives gave birth

to a distinct Goan culture with unique attire,

cuisine, customs, festivals and folklore.

Despite their limited success, the Portuguese were able

to establish the colony by force and keep it for 450

years, which is no small feat in any case. It was a feat of

formidable daredevilry, religious zeal, fortitude, and

navigational skills that speaks volumes about the

Portuguese indomitable spirit.

Basilica of Bom Jesus, Goa, 1594

UNESCO World Heritage

"The churches and convents of Goa,

the formercapitalof the Portuguese

Indies - particularly the Church of

Bom Jesus, which contains the tomb

of St Francis-Xavier - illustrate the

evangelization of Asia. These

monuments were influential in

spreading forms of Manueline,

Mannerist and Baroque art in all the

countries of Asia where missions

were established."

British, Dutch and French Companies

The British East India Company was founded in London in 1600 CE and the Dutch East India

Company in 1602 CE. These companies were joint-stock companies, which issued the shares

in order to pool larger capital required for long distance trade and spread risk associated with

treacherous oceanic travel.

Despite being a private company, the state extended its direct/indirect support whenever

necessary. Queen Elizabeth gave a Charter ensuring monopoly of trade in East to the British

East India Companyfor 15 years.Laterhissuccessor,James I,extended itfor indefinite period.

There was intensecompetition between the British and Dutch companiesin the 17 th century.

• Both Dutchand Britishcompanieswereprimarilyinterestedinthespicetradein Southeast

Asia, but due to the rivalry from the Dutch company, the British company could not be

established in that region and had to withdraw from Southeast Asia.

• On the other hand, the Dutch company was also interested in India and set up its factory

atmanyplaceslike Chinsura in Bengal, Masulipattam in Andhra,buthadtowithdraw from

India due to British resistance.

• In 1759,the Dutchof Chinsuraweredefeatedby the Britishinthe'Battleof Bedara'

and by 1795 they had to leave India.

The French company was late comer in India.

• The French East India Companywasestablishedin 1664 by French Prime Minister, Colbert.

It arrived in India in 1666 and established its factory at Surat, Masulipattam, Pondicherry,

Chandragiri etc.

• As France was the main rival of Britain in Europe, in India also, the French company

emerged as the main rival of the British company. So, they began to compete to dominate

the Indian territories, which came to be known as the Carnatic War.

Why were the political ambitions of European companies encouraged?

• Balance of Trade

• European trade with India was a one-way trade, i.e. there was a high demand for

Indian goods in Europe, but European goods were not in demand in India.

Therefore, these companies would have to bring precious metals for exchange.

• This precious metal used to come from America. Therefore, the British company

started to think on the option how to mobilise resources in India for financing

trade.

• It also started to think that if it would establish its political dominance, then it was able to

get its other business rivals out of business, that would have increased its profits.

Nature of 17 th century globalization

The early modern globalization took place in the context of the transition from feudalism to

capitalism in Europe. The influx of wealth from global trade contributed to the rise of a

merchant class and the development of capitalist economies, setting the stage for the

industrial revolution in subsequent centuries.

• The characteristic economic policy of this era was Mercantilism.

• Itdrovenationstoaccumulatewealththroughcolonization,trademonopolies,and

the exploitation of colonies, shaping global economic structures.

• The rise of chartered and joint-stock companies facilitated the flow of goods across

continents, such as the spice trade linking Europe and Asia.

• These companies, drivenbyprofitmotives, operated on a global scale andbecame

key players in shaping early modern globalization.

• Thereemergedaglobaltradenetwork from Americain Westto Chinaand South-East Asia

in East.

• The system of trans-Atlantic triangular trade linked Europe, Africa, and the Americas in a

brutal trade of slaves, manufactured goods, and raw materials.

• However, history testifies that whenever globalization came into existence, even if we

include globalization in the early Christian centuries and present globalization, then we

come to realise that the balance of trade has always been in favor of India and China. This

remained a major challenge for European companies.

• Because of the accidental discovery of America, which supplied the precious

metals to Europe, European merchants could finance the one-sided Indian trade.

• They further tried to solve this through the Battle of Plassey and that of Buxar in

India and the Opium War in China.

• Colonization and Geopolitical shift: This era witnessed the established empires in Asia;

Ottoman, Ming, Safavids and Mughals, facing

challenges. Soon, the balance of power shifted

which led to the redrawal of the global trade

routes.

• There was the beginning of the massive

diffusion of European culture and values.

Missionary activities, migration, and trade led

to the dissemination of ideas, languages, and

religious beliefs across the globe.

• Columbian Exchange:

• The transatlantic exchange of goods,

plants, and animals had a profound

impact on societies on both sides of the

Atlantic.

• Theinterconnectednessoftheearlymodernworldhadunintendedconsequences,

such as the spread of diseases. For example, smallpox epidemics brought by

Europeans to the Americas had devastating effects on indigenous populations,

reshaping demographic landscapes on a global scale.

'Trade Revolution' of 17 th c.

Niels Steensgaard has pointed about that the Dutch and the English companies were

instrumental in bringing about a revolution in the organization and conduct of Euro-Asian

trade from 17 th century onwards.

• Portuguese company preferred the control the spice trade from India, while the British

and Dutch companies were more attracted to export of new products like textiles.

• Portuguese were primarily confined to the western coast of India, but the British and

Dutch companies expanded even to the Coromandel coast, Bengal coast &Gujarat coast.

• Not simply that, British & Dutch Companies werenot confined only to the coastal regions,

rathertheyexpandedintheinterioraswelle.g.Ahmedabadin Gujarat&Agrain Northern

India.

• So far, the Portuguese company was involved simply in the collection, storage and the

distribution of the products. However, the British & the Dutch companies were not

satisfied simply with the distribution as they needed the larger quantity and so, they

became involved in the production as well.

It is claimed that unlike the Portuguese, the success of the Dutch and the English was not

baseduponthegovernmentmonopoliesortheuseofviolencebutontheirabilitytocompete

in the markets. However, in the Dutch and the English companies, the support of the

governments was not entirely lacking. In any case, there was a significant change in the

composition of trade in the 17 th century.

Change in the composition of trade:

• Commodity Basket: Portuguese company was mainly involved in the export of spices, but

the British & the Dutch companies were involved in diverse items e.g. cotton and silk

goods, raw cotton, saltpeter, indigo, opium, etc.

• During the first half of the 17 th century, in export, the contribution of spices was

74%, while that of cotton goods was 16%. But during the second half of the 17 th

century, the contribution of spices declined up to 23% while that of cotton goods

increased up to 55%.

• During this period, there was a wide expansion in European and Asian trade both.

• For example, the Dutch company used to exchange Indian clothes with spices in

Southeast Asia, theyused to exportcotton clothesfrom the Coromandel coastand

Gujarat coast to southeast Asia. So, Coromandel coast was called the left hand of

Malacca. Through this Asian trade, whatever profit was reaped by the Dutch

company, it utilized the amount for purchasing the products (spices) from

southeast Asia.

• Apart from that, the Dutch company used to export opium from Bengal to

southeast Asia & raw silk from Bengal to Japan.

• Similarly, in 17 th century, the main item imported into India was horses, now that item

became a precious commodity (silver and gold).

Transformation from a trading company to a political power:

The journey as a political power began in Carnatic, where the company first intervened in the

succession matter of Indian rulers. It took this model from French Governor Dupleix.

At that time, the only rival power left was the French company. The French were the late

comer to India, but they became a very formidable rival to the British company by 1730 s. A

conflict for supremacy between the two started from south India this conflict was known as

Carnatic war.

Causes behind the Carnatic Wars:

• Both British & Dutch company competed to monopolize their trade from the region of

south India.

• Coromandal coast was very important for international trade.

• Both French & British companies started to compete with each other in extending their

influence on southern states.

• The Carnaticwarsgotinvolved with European questionsas well.In other words,in Europe

if conflict started between the British & French, that was extended up to India as well.

First Carnatic war

(1744 -1748)

• It was an extension of European question. (Austrian war of succession)

• The conflict started between the British and French power in Europe and this

conflict came upto the doorstep of India after two years.

• In India, it was the British Company which initiated the war but very soon it received a

discomfiture.

• When the Nawab of Carnatic Anwaruddin intervened into the matter, the French power

couldnotbesubdued.Thiswarwasknownforthebattleof Saint Thomewhichtook place

in 1746.

• This battle proved the military superiority of European vis-à-vis Indian states.

• Finallyin 1748,peace wasconcludedbetween the British and French Partywith the treaty

of Aix-la-Chapelle. As per the treaty, there was mutual restitution of the territory.

Lessons/Significance of the First Carnatic War:

• Superiority of the European military

• The real significance of the First Carnaticwar lay in the outcome of the Battle of St.

Thome, which proved the military superiority of small but well-trained European

forces over large, Indian armies.

• Superiority of French in the first war

• The capture of Madras was a salutary achievement. It enhanced the power and

prestige of the French as a territorial and naval power in India.

• Dupleix got opening into the domestic quarrel of Indian princes.

• It demonstrated the overwhelming, far reaching influence of sea power.
• It also revealed the state of political decay in India. Indianspossessed no navy, and

their military was weak, while there was no Mughal backup on land.

• EIC started to build its private army.

• At Madras in 1721 the English Companyhadtotal of only 545 men of all ranks (245

Europeans and the rest Eurasians).

• War with France saw a hasty re-assessment of priorities and, thanks in large part

to the extensive recruitment of Indian troops, by 1763 the Madras Army mustered

some 9,000 men.

Second Carnatic War

(1749-1754)

• Thisstartedon Indianquestioni.e.both,Frenchandthe British companiesintervened into

succession matter of Indian states. In fact, a war of succession had started in two Indian

states, Hyderabad and Carnatic. Both the companies intervened into the matter.

• Atthe end,Hyderabadfellunderthecontrol ofthe Frenchpowerwhile the Carnaticunder

the control of British Company.

Under the circumstances, it was a kind of stalemate in India. So, the two companies arrived

at a negotiated settlement. Representatives of the two companies started discussion leading

to the Treaty of Pondicherry (1754)

• Each side promised not to interfere in local powers.
• Thewargavethe Britishastrongholdover the Carnatic,whichwasasetbackfor the French

company.

• Recall of Dupleix (1754): Dupleix's career ended in 1754. He returned home after the

career of 34 years in India. Charles Godeheu appointed as new GG with wide-ranging

powers to sort out the problems.

• With his recall, there was a complete reversal of Dupleix policy.

• Itservedasahugeblowto Frenchpoliticalambitionsin India,sinceitwashisvision

and ambition which had made the French company a real contender for power in

the Indian subcontinent.

• Hisworkwasundonein Carnatic.Onlyin Hyderabadde Bussycontinuedinfluence.

Even before the treaty could be ratified at home, the Seven Years' war broke out. Thus, the

only effect of the treaty was to give a breathing space to two sides.

Third Carnatic War

(1758 - 1763)

• Once again, this war started on European question. This war was the extension of Seven

years' War (1756-1763) to India.

• The French government sent an important military officer Count de Lally to India

to lead the French party but even the De Lally could not manage the situation

properly.

• French earlier lost the control over Hyderabad and finally it lost the total war.
• In 1760, in the battle of Wandiwash, the British under Sir Eyre Coote routed the French

under De Lally completely.

• In 1763, there was a peace between French and British. The French factories were

returned but they couldn't be fortified. After this, the French lost India and couldn't ever

recover.

Outcomes:

• The Third Carnatic war proved to be the final blow to French political ambitions in India.

• French factories and Pondicherry were returned but without fortifications and

confined onlyto local trade. However, the possibility of the French Empire in India

was over.

• By the end of the Third War, the EIC:

• Became a territorial power in South India
• Established pre-eminence in Hyderabad.
• The most substantial gain was however in the Eastern India after the battle of

Plassey.

• There was near complete French expulsion from Bengal too.
• Soon the French company was wrapped up.

• French government went heavily into debt during the Seven Years' War. It had

neither resource nor intent to salvage the company in India. The Company now

completely lost the royal attention. French EIC formally ended in 1769. The French

crown maintained the possessions thereafter.

Reasons behind the French failure

• British company was much ahead of French company in expertise, resources and

enthusiasm.

• British company was commercially more successful than the French company.
• Dupleix's error:

• Instead of focusing on trade to financially enrich the company, Dupleix attempted

to extend territorial claims. Thus, his initial success could not be sustained in the

long run as he could not absorb the costs of war for long.

• Frenchwereinferiorat Sea(Navaldominance).Frenchhadnopermanentbasenear India

(Mauritius faraway than Bengal) while the British had mastery over Indian sea.

• British company was led by competent officers like Sir Eyre Coote, Robert Clive and many

others but except Dupleix French company did not enjoy the support of any competent

officer.

• Strategic mistakes

• It was a strategic mistake torecall Dupleix after the Second War,French reversals

on ground began after his exit.

• It was also a strategic mistake to ask de Bussy to leave Hyderabad in the Third

War.

• British company was autonomous in taking decision as it was a joint-stock company, but

the French company had to function under the strict control of the government.

• Resources of Bengal had fell into the hands of British after the battle of Plassey.

UPSC CSE PYQs

• "What kind of administrative change was introduced in India under the East India

Company? [1993, 60 m]

• "The object of the Act (Regulating) was good, but system that it established was

imperfect." Comment. [2004, 20 m]

• "The Dual System of Government was a complete failure from the outset. In the first

place, the abuse of the private trade reached a greater height than ever. In the second

place, the demands of the Company for the increase led to gross oppression of the

peasantry." Examine. [2014, 20 m]

Between 1757 and 1857, as the British conquered and annexed different parts of the country,

they were faced with the difficult question of how to govern these territories. Changes were

frequently made to the administrative structure that British East India Company established

in India.

It was essentially a continuous process of experimentation, adjusted and readjusted either in

accordance with the economic/ideological developments taking place at the time in Great

Britain or in accordance with the peculiar on-the-ground realities that the Company

encountered in India.

Approach to understanding Colonialism

While studying colonialism, one should keep following things in mind:

• Although colonialism was basically an economic relationship between the mother

country and a colonized country, it affected the political, social & cultural structure as

well.

• Somescholarsconsidercolonialismasacatalystformodernizationindevelopingsocieties,

while othersemphasizeitsdetrimental effectsoneconomicandsocialstructures, creating

lasting underdevelopment. Colonialism was a series of contradictions i.e. poverty vs.

development phenomena. The essential intended impact of the colonialism is

backwardness and poverty, but its unintended impact was 'development'.

• Colonialism should be studied as a structure, not as a policy. In other words, the policy

can change with the change of officers, but the structure remains the same.

• There may be some change in the policies of individual administrators, whether

Lord Hastings or Bentinck, Lytton or Ripon. But it doesn't affect the basic colonial

structure.

Colonialism can be divided colonialism into three phases:

• Mercantilist phase
• Industrial phase
• Financial phase

The British policies towards India must be studied in the context of colonial interests. All the

administrators from Clive to Curzon were guided by the same motive.

Limited Objectives of the Mercantile Phase (1757-1813)

This phase unfolds after the battle of Plassey and that of Buxar.

Objectives

• Minimize bullion imports (Discourage the drain of precious metal to India)
• Maximize revenue to invest in trade and commerce.

Policies

Althoughthecolonialrelationwasbasicallyaneconomicrelation,itinfluenced political, social

and cultural structure as well. During this phase, the British company followed a specific

political, administrative and socio-cultural policy towards India.

• Political Policy:
• Ring Fence Policy
• Subsidiary Alliance.
• Wars were waged only for commercial interest, otherwise avoided.
• Administrative Policy:
• Not interested in major restructuring of the existing administrative structure.

Preferred to maintain the existing Mughal structure with certain modifications.

• Maintenance of law and order at the minimum possible cost
• Make extraction of revenue efficient.
• Thus,
• Clive didn't bother to take the administration of Bengal directly into his hands.
• Warren Hastings tried to plant British elementson the Mughal system, yet

he wasn't ready to overhaul the whole structure.

• Lord Cornwallis was guided by a sense of British egoism i.e. belief in

supremacy of British institutions.

• Lord Wellesley tried to strengthen the British rule by centralizing power,

codifying laws, and giving sound basis to the fledging bureacracy.

• Economic Policy:
• Origin of drain of wealth
• Decline of handicraft industries.
• Socio-cultural Policy:
• Maintain traditional social structure.
• Orientalism

(1) Robert Clive's Reforms

Dyarchy or Dual Government (1765-72)

Clive'ssolutionofthepoliticaltangleof Bengalwasthesettingupoftheinfamous Dual System

whereby the Company acquired real power while the responsibility for administration rested

on the shoulders of the Nawab of Bengal.

• EIC received Diwani of Bengal directly from the Mughal emperor.
• Clivechosenottousurp the Nizamirightsdirectly.However,sincethe Nawabhadbecome

the puppet of the Company, EIC chose to control Nizamat indirectly.

Thus, the Company acquired the Diwani functions from the Emperor and the Nizamat

functions from the Subahdar of Bengal.

At this time the Company was neither willing nor able to undertake the direct collection of

revenue.

• For the exercise of Diwani functions, the Company appointed two Deputy Diwans,

Mohammad Reza Khan for Bengal and Raja Shitab Roy for Bihar.

• Mohammad Reza Khan also acted as Deputy Nazim.

This system of government came to be remembered as Dual System or Dyarchy, i.e., rule of

two, the Company and the Nawab. In actual practice, the Dual System proved a sham, for the

East India Company exercised all political power and used the Indian agency merely as an

instrument for their purposes.

Clive was fullyconsciousof thefactthat allpowerhadpassed into thehandsof the Company,

and nothing was left to the Nawab except the name and shadow of authority. "This name",

wrote Clive to the Select Committee, "this shadow, it is indispensably necessary we should

seem to venerate".

Reforms in Land revenue system

• Heavy enhancement in land revenue (almost

doubled)

• Indian revenue collectors continued but they

were now under the supervision of

inexperienced/untrained Europeanauthorities

→ excessive corruption.

Impact of Dyarchy:

The system of dual government established by Clive in Bengal was a miserable failure. In this

system, all the powers were enjoyed by company and responsibility of administration was in

the hands of Nawab, who had neither resources nor authority to perform admin functions

because of which a situation of anarchy developed in Bengal.

The company misused its authority to exploit the peasants, artisans, and traders.

• Administrative breakdown: Owing to the impotence of the Nizamat, the administration

of law and order virtually broke down and the administration of justice was reduced to a

farce

• Traders/Merchants

• Indian merchants and traders were forced to pay different types of duties.
• The Company's servants virtually monopolised the internal trade of Bengal and

would undersell the Indian merchants in the local markets.

• Gomasta grain trade monopoly.

• The artisans and craftsmen were:

• Forced to sell their goodsat cheap rates and purchase raw material from company

at high price.

• William Bolts,a contemporary,wrote aboutthevarious and innumerable methods

ofoppressingthepoorweaverswhichweredulypractisedbythegomastahsin the

country, such as by fines, imprisonments, floggings, forcing bonds from them etc.

• They were forced by company to work at very low wage and at times without any

wage at all, to escape this exploitation many craftsmen cut their thumb.

• The craftsmen were forced to divulge their traditional crafts secrets.

• Decline of agriculture:

• The class hardest hit by the new system was the peasantry. The burden of land

revenue was enormous on peasants. Tax farming (to highest bidder) was used to

maximize the collection, it led to the exploitation of poor peasants.

• The Bengali peasant suffered from the evils of over-assessment, harshness of

collection and was subjected to the worst exactions by government officials.

Peasants did not have any protection against the exploitative activities of English

company.

• Finally, it led to the failure of crops and smallpox epidemic.

• Thus, the result of Dual Government was the impoverishment of Bengal's economy.
• From the British perspective, all of this led to the massive drain of wealth.
• However, in India, this extreme exploitation resulted in massive famine in Bengal in 1770.

Company's response to Famine of 1770

• The Companywasnotresponsibleforthefamine

but it and its agents were largely to blame for a

complete collapse of government. W.E.H. Lecky

describes the plight of the people in the

following words: "Never before had the Indians

experienced a tyranny which was so skilful, so

searching and so strong..."

• Neither the Nawab nor the Company cared for

the welfare of people. (Adam Morrisette)

• There was a massive negligence.

▪ "When the famine of 1770 was looming on the horizon, the East India

Company largely forgot all of their duties as Diwan, except those that

produced a profit."

• Servants of the Company added to the misery of the people by trading and

profiteering in essential articles of foodstuff.

▪ "Furthermore, if the agents of the East India Company had, in fact, bought

up allthe riceinanticipationof adearth,theyhadgonefarbeyond shirking

their duties as Diwan; they had grossly abused their position with no

regard for the Bengalis that were, technically, under their protection."

• Clive's Responsibility (William Dalrymple)

• "Clive established an exploitative, extractive system that channelled all the profits

of India back to Britain." "While he was not in India during the famine, he had set

up a system that failed to respond to the famine."

• It proved to be one of the worst events in the history of mankind, in which one-third of

Bengal's population perished (70 lakh to 1 crore).

• Even after the onset of Famine in 1770, the company kept

on ruthlessly collecting the revenue with equal rigour and

vigour till 1772.

K. M. Pannikar very aptly remarks that during 1765-1772 the

Company established a 'robber state' in Bengal and plundered

and looted Bengal indiscriminately. During this period British

Imperialism showed its worst side in India and the people of

Bengal suffered greatly.

Response from London

• As long as the Company kept paying taxes and customs, and

the payment was a huge money for the British treasury, no

one asked too many questions.

• However,thereformsof Clivewereafiasco.Theyruinednot

only the industry agriculture of Bengal, but also

consequently ruined company finances and exports. Thus, both the revenue and trade of

the Company were adversely affected.

Anandmath (1880 s) by

Bankim → Sannyasi

Rebellion in 1770 Bengal

in the aftermath of the

Great Famine.

• Only when the profits sank in 1772, and the EIC had to go to the Bank of England to

borrow, the questions began to be raised.

• It was happening exactly at the time when individual company servants were going back

home with huge wealth. While the servants of the Company were making huge profits,

the Company itself was on the verge of insolvency.

• At that point in 1772, when the American war was about to start and there is huge

corruption going on in England, the old nobility became sensitive.

• Thus, there were two issues that drove the London politics in 1773, the revenue fall

leading to loss of profit and the rich nabobs who were corrupting London culture.

Actions taken:

• When Warren Hastings was appointed as the Governor of Bengal in 1772

• He was shocked to see the condition of the people. Thus,he abolished thesystem

of dual government.

• Thus,thefaminehastenedtheendofdualgovernancein Bengal,andthe Company

became the sole administrator.

• In London, the parliament was recalled considering the issue of the survival of the

Company. In return for salvaging the Company finances and to streamline administration,

the Regulating Act of 1773 was passed.

The Regulating Act 1773

It represents the first attempt of the British Parliament to regulate EIC's activities in India.

Background:

• As the EIC emerged as a territorial power in India, an intense struggle broke out in Britain

as to whose interest the newly acquired empire would serve.

• The acquisition of political power by the Company also had an adverse reaction in Great

Britain.

• There grew the fear that the newly rich nabob class might be able to influence

British Parliamentarypolitics bydintof their economicpower and therebydisturb

the balance of British democracy.

• Although the Company had emerged as an important political power in India, at the same

time company was losing badly as a commercial entity.

• Spending on wars, corruption in private trade and famines had led to huge losses.

Thus, the Company was in dire need of credit just when its activities began to be

scrutinized and had applied to the government for a large loan.

• By 1772, it was verging on bankruptcy and had applied for a loan of 1 million

pounds from the British government.

• At that time, imperial policies began to be seriously questioned against the backdrop of

problems that Britain was facing in keeping its American colonies under control.

Thus, it became necessary to determine the framework of Company's Government in India

and to exert some control on it. By the Regulating Act of 1773, the parliament sought to

regulate the Company to a limited extent.

Provisions:

• Home:

• The Directors of the Company were duty-bound to submit before the British

Government all correspondence relating to civil, military and revenue affairs in

India to enable it to monitor the management of the empire.

• The Company's organization in London was streamlined under this Act by

restricting the voting rights of shareholders.

▪ This was done firstly by limiting the vote to those who held minimum

£1,000 worth of stock. Besides, the shareholder had to be in possession of

the stock for at least one year to qualify for voting.

▪ Members of the court of directors were to be elected for a period of four

years. One fourth of the memberswere to retire every year and stay out of

office for a minimum duration of one year before they could seek re-

election.

• The Act laid down that the Government of Bengal would be headed by the Governor

General and a Council comprising 4 members. All civil and military authority was vested

in the governor general and his council.

• Hereafter, the Governor of Bengal came to be known as the 'Governor-General of

Bengal.' Warren Hastings was the first Governor-General of Bengal.

• The Governor-General was requiredto run the Governmentof Bengalaccordingto

the decisions taken in the council by a majority vote.

• The Governor-General had no power to overrule the decision of the Council,

though he had a casting vote in case the house was divided equally on a given

issue. Each had a five-year term.

• It recognized the precedence of the Bengal Presidency ('Presidency of Fort William in

Bengal') over the two other presidencies.

• The Act also provided for the establishment of a Supreme Court in Calcutta to administer

justice to the Europeans and their employees.

• Sir Elija Impey became the first Chief Justice of the Supreme Court in 1774.

Outcome:

The attempt of the British Parliamentto developa remote-control mechanism to regulate the

Company ended in a failure. The Act had certain inherent loopholes which created problems

in the running of administration.

• Under the provisions of the Act, it was not possible for the Governor-General to act

independently.

• The numerical composition of the council (four members in addition to the

governor general) constituted under the 1773 Act rendered the governor general

vulnerable in case three of the members combined to oppose him.

• The Regulating Act intended to make the Governments of the Madras and Bombay

Presidencies subordinate to the Governor-General of Bengal. But, in reality, the control of

the Governor General over the other two Presidencies was inadequate.

• Though the Act created the Supreme Court, it did not clearly indicate the specific power

of the said court vis a vis the Governor-General-in-Council.

• Later, the Amending Act of 1781 fixed the jurisdiction of the Supreme Court to the

city limits of Calcutta and Europeans only.

• The Regulating Actfailedto resolve the friction between the Companyand its rival groups

in England. Theopponentsof the Companycontinuedtoexertpressureon the Parliament

to discipline the Company.

Althoughthe Actwasawell-meantattempttointroduceabettersystemofgovernment,being

designed inignoranceof the realnatureoftheproblem,itcontainedseveralanomalies. Ithad

neithergiventhestateadefinitecontrolover the Companynorthe Directorsadefinitecontrol

over their servants, nor the Governor-General a definite control over his Council nor the

Calcutta Presidency a definite control over Madras and Bombay. Thus, it only added to

Hastings' difficulties instead of strengthening his hands.

Later, the anomalies were sought to be rectified through a subsequent legislative measure,

enacted in 1784 (Pitt's India Act).

(2) Warren Hastings (1772-1785)

"Hastings provided a coherent shape to a state of which Clive had only sketched an outline,

and he successfully defended that state almost singlehanded with hardly any help from

home against a concerted Indian attack." - Percival Spear

• He became the first Governor-General of Bengal (1773).
• Abolition of Dual Government

• The Diarchywasabolishedand the Companyin

1772 assumed the direct responsibility of the

revenue administration of Bengal.

• 'the Dewanee being ours by right, and

the military and political affairs by

Prescription', Warren Hastings.

• By implication, the Company, also became in

charge of the judicial administration as well.

• Now, the Company had to shake off its

commercial nature to some extent and begin

to assert the authority of a state. Thus started

the initial shape to the British administration in Bengal for future.

Economic Reforms

• Financial Reforms: Transferred the royal treasury from Murshidabad to Calcutta.
• Toll Tax Reform: Hastings opened up and incentivized inland commerce by ending the

dastak system, reducing taxes and standardized collection of duties.

• Hastings was much more successful in his commercial reforms. Trade wasopened

up for everybody. These changes stimulated trade.

• At the same time, Hastings established the lucrative trades in salt and opium as

monopolies for the Company.

• Monetary Reforms: Hastings controlled the issue and value of silver coinage, establishing

coins from the year 1773 as the base value for all future rupees. He also centralized the

production of siccas in the Calcutta mint, and abolished the old custom of annual

depreciations on circulating coin.

• Land Revenue Reforms: Farming System (for maximization of revenue)

• Itwasthephaseoftrialanderror.Manyexperimentsfollowedinquicksuccession.
• Initially: a five-year scheme (1772-76). The auctioning system was carried out

under supervision of diwans and European collectors.

▪ It proved to be a failure, didn't make revenue stable, and adversely

affected agriculture. Both peasantry as well as agriculture were affected.

• Course-correction:

▪ Hastingsnowconsciouslydiscouragedzamindars/intermediarieswhomhe

considered as vested interests who absorbed money.

▪ To gather systematic information about the different aspects of the Indian

agrarian structure he appointed the Amini Commission in 1776.

• After five years, in 1777, the five-year settlement was abolished. A new one-year

scheme with role for zamindars was introduced.

• The system of revenue collection under Hastings was by no means direct rule, but

itdidintroduceanewprincipleintheideaof Europeansuperintendenceof Indian

agency. In the actual control of the revenue management, Hastings was not

satisfied, achieving a little more than a series of unsuccessful experiments.

Golghar, Patna (1786)

It was designed to store grain and

worked like a silo. On the side of the

building is a carved inscription that

states that the granary was ordered by

the governor general in 1784 for the

'Perpetual Prevention of Famine in

these Provinces.'

Judicial Plans of 1772, 1774

Hastings viewed the judicial plan as an essential corollary to the revenue farms. It was

supposedtoestablishacompetentnetworkoflawcourtswhichwouldassistintheliquidation

of debts at interest, deal with disputes between raiyats and farmers or between farmers and

government officers, and to decide on questions of inheritance.

Thus, Warren Hastings (and later Lord Cornwallis) introduced a series of Judicial Plans,

beginningin 1772. Theseplansestablished a hierarchyof courts anddesignated officials who

were to decide matters, taking help from advisors who were well-versed with the parties'

personal laws. This system formed the basic framework for the system of courts that we have

today.

• As per the Regulating Act 1773, he established the Supreme Court in Calcutta in 1774.
• Hastings established a hierarchy of civil and criminal courts (Development of The Adalat

System).

• To make adalats accessible, he divided Calcutta, Orissa and Bihar into six divisions

with several districts each.

• Therewasan Officeofthe Remembrancer,whohadtorecordallcasesatalllevels

and was under the direct supervision of the Governor-General..

• Separation of courts handling criminal and civil cases
• For criminal cases, Qazis and Muftis were appointed.
• Civil district courts under Indian officials were setup.
• Separate laws for Hindus and Muslims in civil justice.

• It safeguarded the personal laws of Hindus and Muslims. The cases relating to

inheritance, marriage, caste etc. were to be decided according to the laws of

Quran with regard to Muslims, and laws of Shastras with respect to the Hindus.

• Codification of laws:

• The idea was to retain, as far as possible, the native magistracy and codes of law,

recorded and oral, to which the people had become accustomed. The plan aimed

at correcting the defects without destroying the traditions of the local systems.

• Hastings believed that the legal practices of the earlier regime were irregular and

arbitrary. He wanted fixed and immutable laws for greater efficiency.

• In 1773, Warren Hastings appointed ten Brahmin pandits from Bengal to compile

a digest of the Hindu scriptural law in four main civil matters--marriage, divorce,

inheritance, and succession. Thus, a series of law codes such as 'Code of Gentoo

laws', 'Colebrook's Digest' etc. came into existence.

Despite the limitations and flaws, Warren Hastings is considered as the father of modern

judiciary in India.

Impeachment Trial of Warren Hastings in the British House of Commons:

In 1785, Hastings was accused of rampant corruption, abuse of office and blackmail by Sir

Philip Francis and Edmund Burke. The impeachment trial went on for about a decade from

1774 to 1784. Finally, he was acquitted.

Pitt's India Act 1784

The various limitations of the Regulating Act and the increasing pressure of the rival groups

on the East India Companyin Englandencouraged the Governmentof Britain topassthe Pitt's

India Act in 1784. By this Act, The British Government was finally able to tighten up its grip

over the Indian administration.

According to the provisions of this Act:

• Established a system of dual control on the Indian affairs. (most imp feature)

• A Board of Control comprising 6 commissioners was created.The Board of Control

was to work in a supervisory capacity on behalf of the parliament.

▪ The Board of Control had no independent executive power. It had no

patronage. Its power was veiled; it had access to all the Company's papers

and its approval was necessary for all despatches that were not purely

commercial.

• However, it was the Court of Directors that actually governed the Indian empire.

▪ The Court of Directors retained its control over commerce and patronage,

but only with the approval of the Crown could it appoint its principal

servants in India, such as the governor general, governors and the

commander-in-chief.

• Normally, instructions would be sent out to India by or via the court of directors,

but there was a provision for bypassing Co D and conveying orders directly to Fort

William through a 'secret committee'.

• The Pitt's India Actelevated thestatusofthe Governor-General toavery large extentand

in this sense, it was an improvement upon the Regulating Act. It made the Governor-

General in India a royal appointment while his authority over his Council and over the

Presidencies was somewhat enhanced.

• The governor general's council was reconstituted by reducing its strength from 4

to 3. More powers wereconcentrated in thehands of the governor general so that

his authority might not be constrained by the council.

• The Bombay and Madras Presidencies were subordinated to Bengal in all matters

relating to war, diplomacy and revenues in unambiguous terms.

• Thus, a clear hierarchy of command and more direct parliamentary control over Indian

administration was established.

The significance of the Pitt's India Act lies in the fact, that, hereafter, the East India Company

becamean organ of thebroader Britishnationalinterest.India wastoplaya subservientrole

in the interest of the British ruling class.

An effective and authoritarian instrument of control was thus put in place, which continued

till 1858 with only little modifications.

Accordingto Prof.PERoberts,this Act'convertedthe Companyintoaquasi-statedepartment'

and rendered its final abolition in 1858 merely 'a formal and explicit recognition of facts

already existing'.